WTO Director presents trade figures for 2013

CENEVRE (CIHAN)- The sluggish pace of trade growth in 2013 was due to a combination of flat import demand in developed economies ( 0.2%) and moderate import growth in developing economies (4.4%) , announced WTO Director-General Roberto Azevêdo while presenting trade figures for 2013 and prospects for coming years.

On the export side, both developed and developing economies only managed to record small, positive increases (1.5% for developed economies, 3.3% for developing economies).

World merchandise trade grew 2.1% in 2013 in volume terms, very close to the 2.3% increase from the previous year.

World trade is expected to grow by a modest 4.7% in 2014 and at a slightly faster rate of 5.3% in 2015.

Several factors contributed to the weakness of trade and output in 2013, including the lingering impact of the EU recession, high unemployment in euro area economies (Germany being a notable exception), and uncertainty about the timing of the Federal Reserve’s winding down of its monetary stimulus in the United States. The latter contributed to financial volatility in developing economies in the second half of 2013, particularly in certain “emerging” economies with large current account imbalances.

The trade forecast for 2014 is premised on an assumption of 3.0% growth in world GDP growth at market exchange rates, while the forecast for 2015 assumes output growth of 3.1%.

Note that the GDP figures are consensus estimates and not WTO projections.

Risks to the trade forecast are still mostly on the downside, but there is some upside potential, particularly since trade in developed economies is starting from a low base. However, volatility is likely to be a defining feature of 2014 as monetary policy in developed economies becomes less accommodative.

Some developed economy risks factors have receded considerably since last year’s press release, including the sovereign debt crisis in Europe and fiscal brinksmanship between the executive and legislative branches of government in the United States.

Developing economies are now the focus of several gathering risks, including large current account deficits (e.g. India, Turkey), currency crises (Argentina), over-investment in productive capacity, and re-balancing economies to rely more on domestic consumption and less on external demand.

Geopolitical risks have introduced an additional element of uncertainty to the forecast.

Civil conflicts and territorial disputes in the Middle East, Asia and Eastern Europe could provoke higher energy prices and disrupt trade flows if they escalate. However, since the timing and impact of these kinds of risks are inherently unpredictable, they are not considered directly in these forecasts.


WTO main building exteriors
Press room
Press room
Azevêdo and WTO economists at the head table

SOUNDBITE (English), Roberto Azevêdo, WTO Director-General:
“World trade growth in volume terms in 2013 slowed to just 2.1% in real volume terms again, confirming of course the scenario that we had outlined of subdued trade growth”.

SOUNDBITE (English), Roberto Azevêdo, WTO Director-General:
“For 2014 world trade should rise by 4.7%. And this is not yet quite at the historical average, but it is better than last year. It would definitely be a step in the right direction.”

SOUNDBITE (English), Roberto Azevêdo, WTO Director-General:
“We foresee a 5.3% [increase] in world trade in 2015 and this would be in line with the 20-year average. Underlying these numbers is the expectation that trade growth in Asia will continue to outpace other regions, while Europe will continue to lag behind, as high unemployment restrains consumer demand for some time to come in Europe”.

SOUNDBITE (English), Coleman Nee, WTO Economist:
“I just wanted to point out that even though we see Asia leading all other geographic regions, in terms of export growth and import growth next year, their growth is still pretty modest by historic standards. For instance, Asia’s exports are expected to grow 6.9% in 2014, whereas the average over the last 20 years, including the recent slow years, is 8.6%”.

SOUNDBITE (English), Roberto Azevêdo, WTO Director-General:
“It is clear that trade is going to improve as the world economy also improves. But I know that just waiting for an automatic increase in trade will not be enough for WTO members. We can actively support trade growth by avoiding protectionism in times of uncertainty –- and, of course, by updating the rules and by reaching new trade agreements”.